Wednesday, 14 June 2017

What’s next? – DAX 14.06.17

The DAX futures were 0.20 percent higher by the time of this writing, trading around 12,788 points, and looking to extend to the upside during the session on the back of a widely anticipated interest rate hike in the United States.

Rising rates would make the dollar stronger, pushing down the euro and supporting exports from key European economies such as Germany. As a result, stock markets would strengthen.

On Tuesday, the index showed a moderate-to-bullish dynamic as willingness to take on risky assets returned to the markets following a weekend marked by political uncertainty due to the parliamentary elections in the United Kingdom and a testimony from the former FBI director James Comey before the Senate Intelligence Committee.

European stocks, and particularly the German DAX, is supported by political instability in the UK as the EU leaders would have to face a weaker Theresa May in the upcoming Brexit talks, which could result in better deals and conditions for the European side.

From a technical standpoint, the 12,800 level seems to be the first resistance to break in order to extend to 13,000 in the near term. The DAX should build strong bullish momentum above the 12,750 mark in order to move higher. At this stage, the immediate support is found at 12,600.

On the data front, the consumer price index fell by 0.2 percent, aligned with analysts’ expectations. No other reports are scheduled on the day in Germany.